Baby Got BRRR...
It's totally... not... QE guys...
Dear Fellow Traveler:
I’m going to keep this one quick.
There’s a reason why the market continues to find stability…
And it’s all right here…
The Federal Reserve was supposed to be tapering its balance sheet down from $25 billion per month to… $5 billion per month. That means… letting things roll off the balance sheet.
But here’s June so far… These are the U.S. Treasury acutions…
The Federal Reserve System Open Market Account (SOMA) is dollar-denominated assets acquired through open market operations.
June 10 – 3-Year Note
Total Accepted: $58,000,003,200
Fed SOMA: $1,043,064,200
So… on June 10… the Fed bought $1.04 billion…
June 10 – 364-Day Bill
Total Accepted: $48,000,804,300
Fed SOMA: $1,568,671,200
June 11 – 9-Year 11-Month Note
Total Accepted: $39,701,375,700
Fed SOMA: $701,370,600
June 12 – 29-Year 11-Month Bond
Total Accepted: $22,395,657,700
Fed SOMA: $395,645,000
June 16 – 19-Year 11-Month Bond
Total Accepted: $14,293,677,600
Fed SOMA: $1,293,674,900
June 17 – 4-Year 10-Month TIPS
Total Accepted: $25,288,893,600
Fed SOMA: $2,288,809,400
June 18 – 56-Day Bill
Total Accepted: $55,218,838,200
Fed SOMA: $216,792,200
June 18 – 28-Day Bill
Total Accepted: $65,505,607,700
Fed SOMA: $256,209,000
June 23 – 91-Day Bill
Total Accepted: $79,236,536,500
Fed SOMA: $3,223,399,300
June 23 – 183-Day Bill
Total Accepted: $70,884,503,100
Fed SOMA: $2,884,094,100
June 24 – 2-Year Note
Total Accepted: $75,866,447,200
Fed SOMA: $6,866,428,500
June 24 – 42-Day Bill
Total Accepted: $57,332,746,700
Fed SOMA: $2,332,723,300
June 25 – 5-Year Note
Total Accepted: $76,966,020,900
Fed SOMA: $6,965,941,900
June 25 – 119-Day Bill
Total Accepted: $63,264,275,300
Fed SOMA: $263,726,000
Do you see it?
The Fed was supposed to reduce its balance sheet.
It bought $30.3 billion in U.S. debt over 14 auctions.
And we have a week to go.
This is monetization…
Money printer goes… BRRR…
Stocks go higher.
No one in the media explains it to the American people.
Stay positive,
Garrett Baldwin
I bet they just did a bit of front running of repurchases this month. Plenty of bills to let rolloff in the next 3 days to get to the net $5B. We’ll see when final net June numbers come out.
Garrett,
Where/how do you account for the rolloff of maturing securities on the books, or are these net purchases by the Fed?
Looking at the balance sheet, securities held this month is pretty flat, 6,371,561 million on 6/4 and 6,370,959 million on 6/18 (we'll see more tomorrow afternoon). Granted it should be dropping. What is growing is the primary credit issued to banks up ~1.9 billion this month.